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A newly released 10-year Prime Central London (PCL) Outlook from Douglas & Gordon Asset Management, an established Fund and Asset Management firm specialising in residential property, shows that global demand from buyers will remain strong for prime properties across PCL. The company estimates that PCL rents for properties in £1m-£4m range will rise in line with UK RP, but underperform capital rises, with PCL property values set to double over the next 10 years. “We would argue that residential property is, in the end, a bet on demographics,” said a company spokesperson. “The governor of the Bank of England has made it quite clear that UK monetary policy will not be determined by what happens within the Central London economy; the “right” Bank of England UK interest rate will almost always be the “wrong” [i.e. too low and thus inflationary] interest rate for Inner London.”
Douglas & Gordon Asset Management expect low inflation and wage growth as well as future fiscal tightening to keep a lid on UK interest rates, helping to drive demand for property, especially in PCL, pushing prices higher in the process. “Our view is that due to further fiscal tightening for the next five years at least, the global deflationary environment, little pricing power amongst UK retailers and very weak real wage increases, UK rates will stay lower for longer than the market currently predicts,” the spokesperson added. With Deloitte reporting that London possesses more people – around 1.5 million – employed in highly skilled sectors than any other city in the world, and with around 300,000 further jobs set to be created in these sectors in London by 2020, it is easy to understand why Douglas & Gordon Asset Management is so positive about future capital growth in the PCL housing market moving forward. |
